[1] This is an appeal against a Judgment of the Tax Court of Canada awarding costs in favour of the Respondent in the lump sum of $25,000.00 ([2000] 4 CTC 2212; 2000 DTC 2382). The appellant alleges that the Tax Court Judge erred in awarding costs in excess of the amount provided in Schedule II, Tariff B of the Tax Court of Canada Rules (General Procedure).

[2] In support of this award, the Tax Court Judge indicated that the assessment should never have been issued and that the ensuing appeal should not have taken place (para. 43). He added:

This view is not intended to point a finger at either the assessment auditor of the Justice counsel. The evidence is that the Finches copied various correspondence respecting these assessments to high government officials and representatives. Thus, it appears that Revenue Canada may have some kind of a bureaucratic number of years beyond which the losses are reassessed, which was applied in this case.

[3] The Tax Court Judge went on:

[44] In these circumstances, this case is an abuse of the Appellant and of the Court process. It required him to hire a very able and well known farm and commercial lawyer, who has approximately 45 years experience at the bar and is will experienced in tax litigation. He conducted the case efficiently and well. The Appellant is entitled to the equivalent of solicitor-client costs. The case began in 1998 and the trial lasted a full day and on-half in Saskatoon, although two full days were correctly set aside for the Hearing. This judge practised in Saskatchewan for more than 25 years. The preparation and conduct of a two-day trial by a counsel junior to Mr. Sanderson, would require a modest fee of about $30,000 for a two-day trial through to 1990. This Hearing only lasted a day and a half, because of the thorough preparation and efficient conduct of counsel. For these reasons, the Appellant is awarded costs, which are fixed in the lump sum of $25,000.

[4] This award was made without counsel being heard on the issue of costs and in circumstances where the respondent in his notice of appeal had not sought costs.

[5] In our view, it was incumbent upon the Tax Court Judge to give the parties an opportunity to be heard on the issue of costs before making the award. Furthermore, we can identify nothing in the record or in the reasons of the Tax Court Judge which would justify an award on a solicitor-client basis. The Tax Court Judge's suggestion that the assessment may have resulted from the application of an unwritten policy is without any evidentiary foundation.

[6] The appeal will be allowed and the matter will be referred back to the Tax Court Judge so that he may again dispose of the issue of costs in a manner consistent with these reasons and after giving the parties an opportunity to be heard. The appellant will be entitled to the costs of the appeal.

"Marc Noël"

J.A.

Saskatoon, Saskatchewan

May 14, 2002

FEDERAL COURT OF CANADA

APPEAL DIVISION

NAMES OF SOLICITORS AND SOLICITORS ON THE RECORD

DOCKET: A-564-00

STYLE OF CAUSE: Her Majesty the Queen v. Brian Finch

PLACE OF HEARING: Saskatoon, Saskatchewan

DATE OF HEARING: May 14, 2002

REASONS FOR JUDGMENT OF

THE HONOURABLE MR. JUSTICE NOËL

DATED MAY 14, 2002

APPEARANCES:

Ms. Karen Janke for the Appellant

Department of Justice

Saskatchewan Regional Office

5^th floor, 101 - 22^nd Street East

Saskatoon, SK S7K 0E1

Mr. James H.W. Sanderson for the Respondent

SOLICITORS OF RECORD:

Morris Rosenberg

Deputy Attorney General of Canada for the Appellant

Sanderson, Balicki, Popescul and Forsyth for the Respondent

Barristers & Solicitors

110 - 11^th Street East

Prince Albert, SK S6V 1A1

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Canada v. Finch, 2002 FCA 194

Citations2002 FCA 194

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2002 FCA 194